Although rate increases in assisted living communities were relatively low last year, nationally increasing by 1.4% over 2022, those rates went up by 18.9% in total from 2021 to 2023, according to Genworth’s Cost of Care Survey 2023, released Tuesday.
“As we look at this year’s data, costs are up, but not as drastically as in previous years, especially assisted living facilities,” Genworth US Life Insurance President and CEO Jamala Arland said in a statement.
Long-term care service rates increased across all provider types, ranging between 1% and 10%, according to the survey, with the increases most substantial for home health aides and homemakers services.
The 1.4% increase in assisted living in 2023 brought the national median rate for assisted living to $64,200 annually, which works out to $5,350 monthly or $176 daily. The 2021 survey showed that assisted living median rates increased nationally by 4.65% over 2020, for an annual median cost of $54,000.
This compares with a 10% increase over 2021 prices for home health aide services, a 7.14% increase for homemaker services, a 5.56% increase for adult day healthcare services, and a 4.92% increase for a private room or a 4.4% increase for a semi-private room in a nursing home.
In 2023, assisted living rates changed the most in Nebraska, where rates were up 15.17% compared with 2022, and Minnesota, where the difference was 12.87%. Rates didn’t change from 2022 to 2023 in Maryland and Montana. Rates decreased from 2022 to 2023 in Louisiana (–4.05%), North Dakota (–1.80%) and South Carolina (–1.06%)
Assisted living in 2023 was most expensive in Hawaii ($112,083 per year), Maine ($104,547) and Vermont ($103,620). It was least expensive in Mississippi ($45,600 per year), Georgia ($49,440) and Alabama ($49,710).
By comparison, according to the 2023 report, the national median rate for a private, one-bedroom room in a nursing home was $116,800 annually, and the rate for a semi-private room was $104,025 annually, representing average increases of 4.92% and 4.4%, respectively, since 2022. The national median price of adult day services increased an average 5.56% in 2023 over 2022.
Inflation and housing market trends stabilizing in the post-pandemic era were the top factors contributing to cost increases in assisted living, whereas a shortage of skilled workers was the top contributing factor for nursing homes and home health, according to Genworth.
“With 10,000 baby boomers turning 65 every day until 2030, and seven out of 10 of them likely to need long-term care service and support at some point, there is increased demand for skilled workers in the long-term care space,” Arland said.
Although 95% of respondents for all provider types identified person-centered care as a priority, staff training and costs were cited as top barriers to providing that care. Samir Shah, CEO of Genworth Financial subsidiary CareScout Services, which partnered with Genworth on the survey, said that person-centered care was a new component in this year’s survey because it helps better understand how providers think about the quality of care they provide and at what cost.
Genworth and CareScout recalibrated the survey to align with the aftermath of the COVID-19 pandemic and shifts in the long-term care industry. New questions on care options, cost drivers and person-centered care now are included.
The survey polled 15% of licensed assisted living communities, resulting in 3,739 completed surveys. Genworth noted that 70 different names or designations exist for communities licensed as some form of assisted care, with fewer than 40% using the term “assisted living facility.” Due to those variations in licensing requirements, both small group homes and large multi-service facilities qualified as assisted living communities for the purposes of this study.
